Briefing paper on carbon capture usage and storage

Carbon capture usage and storage refers to a set of processes that capture carbon dioxide (CO2) from waste gases produced at industrial facilities and either: (i) permanently store it in offshore geological storage sites (Carbon capture and storage or CCS); or (ii) reuse it in industrial processes such as the production of chemicals, minerals, plastics and synthetic fuels (Carbon capture and usage or CCU). CCS and CCU are increasingly being looked at in a joint way: Carbon Capture Usage and Storage (CCUS).

CCUS is widely expected to be key to mitigating against climate change and helping the UK reach its CO2 reduction targets. This is because CCUS reduces the release of CO2 from large emission sources across a number of sectors (electricity, heating, industry and transport) into the atmosphere. CCUS also creates potential for CO2 to be re-used, for instance to generate low-carbon power, aid industrial processes and make new products.

Despite Carbon Capture and Storage being considered a viable technology and the development of Carbon Capture Usage progressing, at March 2020 there were no operational CCUS sites in the UK. Key barriers to the deployment of CCUS include high infrastructure costs, lack of commercial viability, and concerns around safety.

The UK Government supports the development of CCUS. There have been some policy delays: in 2007 and 2012 successive governments launched and cancelled two initiatives to support the establishment of the UK’s first Carbon Capture Storage site. More recently, the Government’s guidance on UK carbon capture, usage and storage set out its approach to CCUS:

The approach is designed to enable the UK to become a global technology leader for CCUS and ensure that government has the option of deploying CCUS at scale during the 2030s, subject to costs coming down sufficiently.

To progress this ambition, the government has set out action under 3 themes:

– re-affirming our commitment to deploying CCUS in the UK subject to cost reduction;

– international collaboration on CCUS; and

– CCUS innovation.

The Government launched a CCUS Cost Challenge Taskforce in 2017 to provide advice on the steps needed to reduce the cost of deploying CCUS in the UK. It concluded that the deployment of CCUS at scale was key to driving cost reductions; it recommended that industry and government needed to work together to create CCUS clusters – regional groups where several CCUS facilities share infrastructure. This led to the launch of the CCUS Deployment Pathway in November 2018 which sets out the government’s plan to (i) enable the development of the first CCUS facility in the UK from the mid-2020s, and (ii) deploy CCUS at scale during the 2030s subject to costs coming down sufficiently. 

During 2017-19, the Government launched a number of programmes which would fund CCUS technology development and deployment: (i) as part of wider schemes – for instance the Industrial Strategy Challenge Fund and the Industrial Energy Transformation Fund – and (ii) specific CCUS grant funding – such as the CCUS Innovation Programme and Carbon Capture Usage and Demonstration Programme. 

Budget 2020 announced a new £800 million Carbon Capture and Storage Infrastructure Fund to establish CCS in at least two UK sites, one by the mid-2020s, a second by 2030, noting that budgets would be finalised at the Comprehensive Spending Review.

The Government’s approach to CCUS has faced some criticism, namely for lack of progress despite widespread acceptance of the viability of the technology. The House of Commons Business, Energy and Industrial Strategy Committee published a report in April 2019 which concluded that, despite some progress, the Government’s targets were ambiguous “with no clarity on the ‘scale’ of deployment that Government plans to bring forward, nor a definitive answer on the apparent precondition that this essential technology must become cheaper before it is widely deployed.” The House of Commons Science and Technology Committee came to similar conclusions about the “lack of clarity and ambition” in the CCUS Action Plan in its August 2019 Clean Growth report.